Another "why you need a will" story

The New York Times discusses the legacy of Bill Gottlieb, who owned an enormous portfolio of Manhattan real estate, much of it dilapidated. The estate planning bits don't come in until halfway through the lengthy write-up. Although Gottlieb paid millions for his properties, and although he consulted a number of law firms about estate planning, he just wasn't willing to pay the fees to have a will drafted.

The result was that a 1972 will, drafted before his acquisition of so much real estate, was controlling. Colorful family fighting ensued.

The most interesting detail to me is that the real estate portfolio has been estimated to be worth $1 billion. The family negotiated a settlement with the IRS for federal estate taxes of just $50 million, to be paid over 15 years. That's just a 5% federal estate tax rate! The family has some damn fine negotiators on their team.

Admittedly, real estate can be hard to value, and some of the experts quoted in the article felt that new zoning and other restrictions may have caused values to deteriorate. But even if the property was worth only half a billion dollars, that is a 10% tax rate.